Amsterdam has a reputation for being a destination where almost anything goes.
While it's true there's a live-and-let-live attitude, the city is unfairly overshadowed by its liberal politics, with images of smoky coffee houses and ladies of the evening available for rent. However, Amsterdam would prefer to be seen for what it truly is:a progressive European capital with more bustle than hustle.
Amsterdam is as hip as Paris and as bohemian as Berlin. It's also a city eager to revitalize itself. Not so long ago, for instance, the docklands area was a tourist's nightmare. If a cab dropped you off there in error, you'd grip your wallet tightly and try not to panic as you hurried to get away from the dilapidated buildings and seedy characters.
These days, visitors deliberately head there. Old warehouses have been transformed into happening eateries, and the industrial landscape has been transformed into funky commercial spaces. The Cafe-Restaurant Open on the Westerdoksplein is a shining example of the shift. Once a revolving railway bridge built in 1922, Cie, a cutting-edge architectural firm based in the city, worked magic to make it a place where tourists and locals munch and mingle, perched at tables two storeys above street level for an elevated view of the canals.
Newer hotels have followed suit, with thoughtful contemporary design blending harmoniously with Old World charm. Home to 51 rooms, the cozy Banks Mansion blends a neo-classical facade with an Art Deco-inspired interior. The renovated former bank building borrows its light and airy decor from Frank Lloyd Wright. With The Dylan, the transformation was even more radical. Once a theatre dating back to 1632 that met a fiery end in 1772, it's now a luxe boutique hotel with a range of rooms available to suit your mood, from racy red to zippy orange and gold, connected to the golden era of spice trading by the East India Company.
What has the city buzzing these days is The Hermitage Amsterdam, a sparkling jewel joining more than 50 local museums. The building served as a nursing home for more than 300 years. The museum still features the original exterior walls, but an extreme makeover transformed the interior space, tripling the original amount of natural light.
Its inaugural exhibition, At The Russian Court: Palace and Protocol in the 19th Century (until Jan. 31, 2010), is a stunner. It's light on the boring stuff, and heavy on capturing the thinking and pomp of the time. In room after room is a parade of opulence, from playing cards to dainty shoes and ball gowns. The arrival of a new museum is especially welcome, given that the Rijksmuseum is undergoing restoration. It's still worth visiting, since it has pulled together a greatest-hits exhibition of its masterpieces. The museum devoted to the works of Van Gogh is a must, too, but you'll be battling crowds.
Don't forgo some of the lesser known museums: The Amsterdams Historisch Museum is full of treasures from the city's past, from works of art to archeological finds, while the quirky but nicely laid out Tassenmuseum Hendrikje houses one of the world's largest collection of handbags:more than 3,500, including the quilted Chanel bag to one made of human hair. And finally, there's Foam, a funky space that pays tribute to the art of photography.
Come nighttime, party it up at a "brown cafe," the Dutch equivalent to an English pub. The vibe is laid back and rustic. Nothing posh here, just plenty of beers on tap and quick hapjes, or bar snacks, such as cheese, olives and bitterballen (fried balls of meat and potato). Make no mistake: This is beer territory. Since the 17th and 18th centuries, when brewers lined the canals, the Dutch have been loyal to their beer.
And if Heineken is your beer of choice, visit the Heineken Experience, an attraction/museum/bar devoted to the suds. (Order ahead to get a personalized bottle of the brew.) If you're not a beer fan, don't worry:Restaurants and cafes pour plenty of wine, including some Dutch varietals, but for anyone who can distinguish red wine from white, they're not quite up to snuff. Love the nightlife and got to boogie? Check out a big-name club like Melkweg or Paradiso (housed in a former church.)
Despite the bounty of entertainment and sightseeing options in Amsterdam, most tourists want to see the Red Light District, still a top attraction. But even it is changing. The number of windows displaying prostitutes has shrunk from 500 to 300. The current mayor would be pleased to see that number dwindle further by making licences to do business tougher to obtain. Designer boutiques and other non-risque businesses are moving into the vacated spaces. And streets once known as hangouts for drug users have been spiffed up with quaint bars and shops that now attract the funky set, not the junky set. That's just further proof that Amsterdam evolves with the times, which has always been one of its irresistible charms.

SIDEBAR: If You Go
Best bet for stretching your travel bucks: Buy an I Amsterdam Card (iamamsterdam.com) to gain free entry into many top museums, canal cruises, big discounts on restaurants and concerts, and unlimited use of the city's bus, tram and underground system. It starts at 38 Euros for a stay of 24 hours and is well worth the money.
Smartest tips for visiting the Anne Frank Huis: As the city's top tourist attraction, long lineups to get in are the norm, but that's not how you want to spend your precious vacation time. Visit first thing in the morning (it opens at 9 a.m.) or go late in the day to avoid the crowds. Or, to skip the line altogether, pick the day and time well in advance of your trip by buying a ticket online (annefrankhuis.nl).
Danger alert: There are more bicycles than people in Amsterdam, and they insist on having the right of way. Look both ways before you cross streets, or risk becoming bike-path roadkill.
Savvy souvenir shopping: Strolling through the flower market, located on the Singel canal at Koningsplein, you'll be tempted to buy some bulbs. To avoid any hassle from Canadian customs folks, make sure packages have stickers on them indicating they're suitable for importing into Canada. Need cheap and cheerful tchotchkes such as fuzzy slippers that look like wooden shoes? Browse through Albert Cyupmarkt (on Albert Cuypstraat), a busy flea market with oodles of junk and gems.
Skip it: Unless you're a sushi lover, avoid the vendors selling raw herring garnished with onions and pickles; just gawk at the locals gobbling them by hanging on to the tails and lowering the whole fish into their mouths. And, if you're not seriously in the mood to buy diamonds, walk on by the diamond factories offering free tours.
For more information, visit the city's official website: iamamsterdam.com, or see Holland.com.